Why BC's Flipping Tax Will Make Housing More Expensive 💸
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- čas přidán 29. 02. 2024
- Could the new 20% home flipping tax in BC (that is meant to increase home affordability over time) actually cause home prices to rise to even more unaffordable levels?
In this video, Surrey REALTOR® Steve Karrasch of Macdonald Realty explains why he thinks this new tax just made housing affordability even worse in the province.
Watch the housing minister on The Tom Storey Show: • Density VS Affordabili...
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Problem is those so called "flippers" putting new paint and changing door knobs are adding 200k on that house..
Government spending is what added the $200K.
100k each
@@SteveKarrasch then your clearly misinformed
You are right, government spending clearly doesn't cause inflation.
Never had an investor try paying more then buyer that would owner occupy. Every investor wants to grind the price.
Let's hope flippers instead of just painting the house and profiting from it can now buy even older properties or land and build 4 new units instead of just flipping one, that would probably be exempt and bring more inventory.
Does adding a basement suite exempt you?
@@SteveKarrasch One more unit already helps, + an ADU even better
Also the fact that it is already so expensive to buy. People need more rental units. So by limiting investors those houses will stay single family or not sold at all..
Bingo!
Mostly city folks.
Developers will adapt without presale investors.
The world changes everyday.
Steve, you nailed it. I hope Ravi reads this!!! Here is what he said when he was appointed housing minister;
"He said that when his reading was done he wrote himself a note saying he wanted to cut planning red tape, increase housing supply, invest in affordable housing and protect exiting rental stock."
We are just completing selling our first rental in years, never thought I'd say this because we hold REI's on a forever time frame. We are paying down debt, getting us closer to mortgage-free and free to spend our $$ where we want. We currently own 9 rental doors and have sadly removed many families in the past 2 years with a cash-for-keys plan because of costs and horrible RTB rules. They all had rents that were under market rents and now, two families left for Alberta, and 2 others are paying almost double elsewhere. The new(more) rules placed on LL"s has forced our hand, we will never rent to families, or any long-term tenant again unless RTB rules become more landlord-friendly. In fact, we are looking to bail altogether on being an LL at the next possible chance. So my grade on your plan, Ravi, huge fail. You are not protecting current rental stock if we are anywhere close to the average LL.
Good luck and I totally disagree with most of your policies!! Bring back free market capitalism, so we hard-working Canadians who live, work and spend here, stay here!!!
Now back to your spin class(I am impressed with your fitness routine). PS Good luck with increasing the housing supply, nothing you've done is helping.
Hey dumb money.
Where are all the interest rate cuts you promised everyone.
It's March already?
I bought the rough rental house of the neighborhood and fixed it up.
Never would bother now. Waiting....
Once interest rates come down a bit this fall regular people looking for a home will buy presales.
Regular people were never really given a chance to, they were all snapped up by investors behind closed doors.
Thats how the racket works.
70% or more of new condos in Toronto are bought by investors
Over 30% of the cost to build a house goes to permit fees that goes to the provincial government and you have to wait 3 years before building can start. The only way to fix housing is if the government gets out of the way and let the free market do it's thing
Please stop making sense in the comments. There is no room for that here.
Add the 20% and then it will be close to 50% taxes and fees for the buyer after the flipper lol. Cmon Ravi get off the spin bike and answer Steve's questions
@@SteveKarrasch 🤣
I keep repeating and will repeat ad nauseam until people start listening: Canada does NOT have a "housing shortage". OECD in 2021 estimated Canada has 1.3 MILLION vacant homes. They're deliberately kept 'off the market' to artificially limit supply, keep values higher for whatever is left "available", and in most cases can also be used as a tax-write-off after "claiming losses". It's why the feds brought in the "Underused Housing Tax" - but which ridiculously only applies to non-resident foreign owners, while ignoring that vastly more properties are hoarded and "land banked" by domestic owners. Both Vancouver (3% "Empty Homes Tax") & Toronto (1% "Vacant Home Tax") have brought in their own. BC has brought in a provincial "Speculation and vacancy tax" that applies to around 47 cities/districts (.5% for Canadians/PR who are not "untaxed worldwide earners" and 2% for foreigners and "untaxed worldwide earners"). So we do not have a "housing shortage". We have an AFFORDABLE housing shortage, and an AVAILABLE housing shortage, which are not the same thing. The false narrative that all we need is "more new housing" conveniently supports a scenario where developers - speculators & "investors" - can continue building recklessly, regardless of whether or not any of the new builds are AFFORDABLE either. Developers will happily build to the moon, until we are as bad as China, which now has an estimated 1.4 BILLION vacant properties... and still NOT affordable!! What we NEED is a federal UHT/EHT/VHT that applies everywhere in Canada, to every type of owner (except the above exemptions/reasonable exceptions).
Re: Pre-Construction builds, ALSO look to China's MILLIONS of unfinished homes that people either paid for or still paying mortgages for, but will never see finished.
Read the book "Sick City" (2021) by UBC Prof & Urban Designer Patrick Condon. For years he insisted we need only "build more housing" to restore housing affordability, but he now admits he was wrong. Search "download Sick City free PDF Patrick Condon" to get the link to download a free copy (the site is "justicelandandthecity"). Residential housing "investment" should be banned across the board. Housing is a Human Right under Article 25 of the 1948 Universal Declaration of Human Rights and under Article 11.1 of the 1966 International Covenant on Economic, Social and Cultural Rights (ICESCR), NOT an "investment vehicle" to enrich others. Find something else to "invest" in.
Probably yea. All those Chinese millionaires who park their money in Canadian real estate are definitely not renting them out lol
Your absolutely right
Stats can says there is one housing unit for every 2 1/2 Canadians.
There is no physical shortage, most people who bought in the last 5 years aren't end users
@@user-vi8ci2bi6b thanks for that. Do you recall which StatsCan report it is? (Kind of a weird metric they use in this example.)
@@lynb1022
Not sure.
It was on Jon Flynn's channel.
Was called 1.2 million missing homes.
@@user-vi8ci2bi6b Thanks, actually stumbled upon it yesterday and assumed that's where you saw it (had not seem that sort of calculation before, good info to have).
Someone needs to tell the NDP that to effectively govern you need to use both the carrot AND the stick. Just using the stick only scares away investment, and investment (of all types) is what's needed to bring supply to market. But that's probably asking too much in an election cycle where it's easy to blame others in exchange for votes, which is all this really is.
What do you think about increasing non-market housing?
If a development corporation was run as a charitable institution and didn’t need to make a profit that could bring down the cost of new housing units a bit (6-7%).
I don’t know about Surrey specifically but many cities could help make new construction more affordable by reducing the high development and permitting fees.
Freehold is the only way, with less tax and less government meddling
U sure are bothered by this new flipping tax.
I know sooo many people including myself who bought and are looking for fixer uppers TOO LIVE IN!!
This new law
Probly shortens your client list.
As if we aren't paying enough tax already. Why don't we spend tax money more efficiently and actually go after corruption, we would actually be able to cut taxes. Government spending and corruption are the biggest culprit in housing crisis.
I think British Columbia would benefit from increasing property taxes and reducing sales and income taxes.
Do share the why?
@@DummMoney-rr1fi lowering taxes that impact all people who live and work in the province would leave more money in the pockets of people who need it most; lower income and younger people possibly trying to save for a down payment.
Higher property tax rates could and should reduce costs of property development and lower/eliminate land transfer taxes.
Housing construction of little, itty-bitty units is going on everywhere I look in the Fraser Valley. Am I to assume these units are all pre-sales? On another note, could you do a segment explaining how or why the "overnight rate" effects real estate.
Yes. Itty bitty units are all presold.
Everything in the greater Vancouver area and Frazer valley since about 2016 is 100% presold almost entirely to flippers.
Don't ask him about BOC overnight rate,
Lol
He's a guy who took a Realtor course.
Lol
Not an economist.
Bond yields set mortgage rates.
@user-vi8ci2bi6b = Economist.
MBA
Double subscribed and double liked, I hope Ravi misses a spin class to free up time to come on the show and answer that question.
We have asked.
The only way to limit speculation is to allow the market to crash in condos so hard that investors get traumatised. But that also means hurting owners who bought high. You can't have your cake & eat it too. Free market, people
Why only 20%
Why not free pharma too?
Lol, need willingness to drop the drug habits and also securing higher paying jobs. Try trade school, then work a couple years, then talk to the banks. Or just sit back on the couch and complain
Hilarious logic of yours that a first time home buyer couldn't afford to buy a fixer upper property and improve it over time, but with a "conventional mortgage" could afford to buy a property flip at a far higher price (including flipper profits). GTFO
The fact that realtors HATE the flipping tax is a good sign that it is likely a good thing.
You are just upset that you might lose some potential investor clients as a result of this
Michael, you are forgetting the one fact that banks won't lend on these types of properties, lol. Most first-time home buyers I know aren't paying cash for a home. So, what you're saying is that you'd rather see run-down houses sitting vacant rather than hard-working Canadians providing the service of improving these sh.tholes to a higher standard for rentals or resale?
Steve's years of experience are surely showing through in his videos nowadays. Good job, you earned my support
Exactly all these so called flippers get in between transactions to inflate the price nothing more .
Even pre-cons it doesn’t make sense why a unit should go through a flippers hands to finance construction there is either demand or there is not from the user ‘s end , I don’t get how these units will be resold at a higher Price when there was no demand in the precon stage to begin with .
@@DummMoney-rr1fi unless it’s land or a former grow up house everything else is pretty much financeable .
Your super man flippers are not saving s*hit .
The only thing they do is fuel the Ponzi scheme.
If they really went by your claim they would focus on starter homes only but instead the more flips they do they reach for higher and higher price tags like crack fiends .
And not to improve the rental standard not mention god knows if the money made from flipping went anywhere cause worthy as you make it sound like .
@@DummMoney-rr1fi what are you talking about banks wont lend on these types of properties? Maybe a post-fire rebuild or a complete crack shack that requires tear down, but investors flip ALL TYPES of entry levels homes (and more). But the entry level house is the easiest to flip and profit from. It sounds like you don't know any real estate investors or lenders.
Unintended consequences.
I thought new builds were exempt
🤞
Just trying to get more votes. PTT and capital gains taxes already makes flipping not worth it. I agree if anything it only decreases future supply of housing due since all development are financed.
Exactly.
Another nothing sandwich....
💩🥪
This tax applies to assignments. That is the game changer. That will put a huge dent on demand.
Bigger dent in new home starts.
Your right, never thought of this angle. It's like giving the druggie a $20 instead of a swift kick in the a.s
Builders and developers will adapt.
Housing was built in the 80s with interest rates 11 to 22%
They will be built again, the global downturn is drastically slowing lumber exports, price of steel is down.
Trudeau is bringing in all kinds of cheap labor.
Building inflation is shrinking
BS. this is a good move and hopefully it comes to the states.
He makes some pretty loaded statements. One family scraping together funds to buy a home only to be taken out by four investors. Does that not play investors against primary resident homeowners? Not only that, investors don't come in and bid against others and offer top dollar only to flip a unit. There's not enough spread.
Correct. A flip is not bought in multiple offers.
Obviously this buyer was trying to buy something they couldn't afford. Need a better realtor, Steve?
Tax upon tax upon tax…should save us! 🎉
Another day, another housing tax. Hope Ontario doesn’t copy BC on this one.
Haha, BC is definitely winning the tax housing game!!
First Star - Eby
2nd Star - Ravi
3rd Star - TBD
@TomStorey Why not? It'll be so effective 😆
Support comment 🎉❤😊
You are right builders will not be able to fund pre cons
It's a shame.
Fast forward 5 years for the lack of supply to be way worse@@SteveKarrasch
When builders cannot fund precons then it means they will not buy the land. That means the land value will go down. There you go the tax is working by bringing prices down .
They can't fund the precons now
Maybe they can find tents.
I don't want to BE YOUR TENANT.
I want to buy my own affordable home and pay my own mortgage, NOT YOUR MORTGAGE!!!
Your greed doesn't even grasp that.
You talk about your wants and others greed. Looks like your greed without working for it is the issue.
I looked into this. You are wrong and self interested. This video is a swing and a miss.
Swing and a miss for the NDP.
Only the Realtors seem to hate this new law
Makes me wonder if there's a whole lot more flipping going on than we think
eby and ravi are either evil or absolutely incompetent.
They are smart guys, they just have a different philosophy.
@SteveKarrasch well their "philosophy" is hurting many people and it's certainly infuriating that they are pitting British Columbians against each other. the streets in Victoria are littered with drug addicts, who they enable. i've never seen the island is such a sorry state. it's been all downhill here since the NDP got into power. anyone who tries to get ahead is demonized for trying to make a profit... and scapegoats for their failed policies. personally, i think Ravi has brain damage from his field hockey days... and eby is a sadistic creep. i HOPE the conservatives can take them out next election.
@@SteveKarrasch well their "philosophy" is hurting many people and it's certainly infuriating that they are pitting British Columbians against each other. the streets in Victoria are littered with drug addicts, who they enable. i've never seen the island is such a sorry state. it's been all downhill here since the NDP got into power. anyone who tries to get ahead is demonized for trying to make a profit... and scapegoats for their failed policies. personally, i think Ravi has brain damage from his field hockey days... and eby is a sadistic creep. i HOPE the conservatives can take them out next election.
They have just ended up on the wrong side of capitalism. Steve needs to ask if either Eby or Ravi or their families have flipped homes
I think Eby is a life long renter.
The real solution to increase interest rates back to normal 7.8%.
And have housing prices drop back to 195k to 220k.
Get real jobs you greedy private "investors".
We know how you refinance capital gains or transfer spouses to take advantage of income tax loopholes.
People at the bottom of the mountain get crushed worst when it comes crumbling down.
Karrasch for Premier
I already have a low approval rating… that means I’m qualified right?
I don't think you need much, but probably be a Canadian citizen. From Surrey may or may not help.
This is the stupidest thing by far. It's going to make it even harder on everyone instead of easier.
less turnover in RE is bad for everyone.